(The following information was submitted later :) The original 1951 estimate was computed on the basis of consumption factors which indicate in terms of dollars the supplies to be consumed and equipment to be replaced during the fiscal year. To this total is added the estimated stock level which must be on hand at the end of the fiscal year in order that operations may continue until additional funds are made available. From the total of these two computed amounts is subtracted the inventory of stocks on hand which are applicable in size, quality, and condition. This computation results in an estimate of net requirements as shown in the budget. For example, the gross estimate for the purchase of food during 1951 amounted to $194,574,000, and it was found necessary to have a year-end inventory of $116,506,324, making a total gross requirement of $311,080,921. The inventory on hand amounted to $167,029,919, or approximately $50,500,000 over the year-end inventory considered necessary. This excess amount was applied as a credit to the gross consumption requirement, thereby reducing the amount of funds requested in the estimate. In computing the supplemental estimate, this excess inventory was no longer available, therefore, it was necessary to request the total amount. If the supplemental estimate had involved only the strength increase, the amount required for subsistence would have been $61,000,000. However, certain factors other than the application of excess stocks were involved such as follows: Deficiency in original estimate due to increase in cost of food from 90 cents allowed in original estimate to the May 31, 1950, price of 98 cents__ Funds required to feed additional Army and Air Force inductees Funds necessary to finance increased sales to Air Force and other Additional funds required to extend pipeline from 116 to 180 days $34, 000, 000 900,000 6, 000, 000 30, 000, 000 Funds required to cover the difference between the cost of the peacetime ration and the combat field and operational type of ration 20, 000, 000 Funds to cover estimated combat losses, pilferage, destruction, and excess issues in combat areas___ Funds required for issue of comfort items such as razors, tooth brushes, etc____. 8,000,000 7, 000, 000 The computations outlined above have been applied throughout the balance of this budget estimate insofar as procurement and replacement of stocks is concerned. The funds required for employment of additional personnel have been computed on the basis of workload information derived from current monthly cost-accounting reports and work-measurement data. Mr. ENGEL. You are going to have to fill a pipeline from here to Korea; are you not? General FELDMAN. That is correct. Mr. ENGEL. For these extra men? General FELDMAN. That is correct. Mr. ENGEL. That means about a 3 to 5 months' supply? General FELDMAN. Just about that. It will vary. On the average, it will be from a 3 to 5 months' supply. Mr. ENGEL. That is one item. The same thing is true of subsistence and clothing, but that still does not account for it. It must consist in the extra transportation charge and things of that type? General FELDMAN. Not the transportation charge. (Discussion off the record.) Mr. SIKES. Is it not true that the estimate previously justified for the Regular Establishment for the fiscal year 1951 is unusually low because you were using up reserve supplies? General REEDER. That is correct. Approximately $50,500,000 in excess stocks were applied in computing the 1951 estimate, thereby reducing the appropriation request by that amount. In addition, the estimate was computed on the basis of a directed ration figure of *90 cents, whereas the ration value of May 31, 1950, is 98 cents, thereby incurring a contingent deficiency of approximately $34,000,000, which has been included in this supplemental estimate. STATEMENT OF LT. COL. HOWARD G. SMIGELOW Mr. MAHON. I believe Colonel Smigelow, Chief, Budget and Fiscal Branch, has a statement to make at this time. Lieutenant Colonel SMIGELOW. It is my privilege to justify the fiscal year 1951 supplemental estimates for appropriated funds totaling $1,278,000 to support the special services program for the welfare of the enlisted men of the Army. The appropriations are requested under the appropriation "Quartermaster service, Army," subappropriation "Welfare of enlisted men, projects 401, 402, 403, and 404." The mission of special services is to provide a well-round off-duty athletic and recreational program for the enlisted personnel of the Department of the Army. The additional funds are necessary to carry out this mission in the various categories shown below and for which funds were not previously requested in the original budget estimate for fiscal year 1951. The detailed justifications for the above amounts are included in the supplemental estimates for fiscal year 1951. However, the major portion of the $898,000 required for the expanded Army is for the purpose of providing initial issues of athletic and recreational supplies to replacement training camps and a general hospital, which are to be reactivated, and the necessary civilian service-club directors and librarians to operate the service clubs and libraries at these installations. The amounts provided for the task force, on a per capita per man per month basis, represents only a small fraction of a dollar per man per month for athletic and recreational supplies and equipment. This program will require immediate implementation for such items as paperbound books, hit kits, air-mail stationery, small games, athletic supplies and equipment, and so forth, which were not previously budgeted for in fiscal year 1951 and which are not available in existing depot stocks. Our nonappropriated fund sources are insufficient to do the entire job. In these critical times, the morale of the soldiers is highly important and for the balance of fiscal year 1951 the "welfare of enlisted men" program will require continued emphasis. Great importance is placed on these matters by the President of the United States, the Department of Defense, the Department of the Army, civilians, parents of soldiers, the churches, the press, and the country generally. I am prepared to explain and justify each item of the budget to the extent you desire. Mr. MAHON. Thank you, Colonel. We will now hear from Colonel McGiffert. 69887-50-pt. 2- -5 STATEMENT OF COL. S. J. McGIFFERT Colonel McGIFFERT. Gentlemen, the purpose of the Army's troopinformation program is to inform soldiers of the country which they serve the world events which affect their country, and the reasons for the soldier being where he is. This is done through prepared talks, oversea service newspapers, and oversea English-language radio broadcasts. The purpose of the education program is to raise the educational level of soldiers and officers in academic subjects, so that they can most intelligently perform their duty. In peacetime the emphasis of the program is on raising the Army's educational level; however, in emergency the emphasis shifts to information. Under these circumstances, the education program is restricted to providing those individuals who require it with sufficient basic education-reading, writing, and arithmetic-to permit them to perform their military functions. This program is carried on in training areas and at static installations. The information program, on the other hand, is continually carried to the troops in all areas, by all means available, in order to tell them why they are fighting and to bring them news of related events. The implementation of these programs, in the present situation, requires additional civilian personnel and facilities at replacement training centers to be reopened and for increased military personnel. strength in the continental United States. In the Far East Command, the implementation requires additional civilian personnel to replace military personnel and to provide additional informational facilities for the increased strength of that command, including Korea. It also requires the establishment and operation of ratio-broadcasting stations for the troops in Korea and the strengthening of the present Armed Forces radio-broadcasting network in Japan. Mr. MAHON. Thank you, Colonel, for your statement. ORDNANCE SERVICES AND SUPPLIES, ARMY WITNESS MAJ. GEN. E. L. FORD, CHIEF OF ORDNANCE Mr. MAHON. We will now take up the Office of the Chief of Ordnance. GENERAL STATEMENT General FORD. The supplemental budget estimates submitted by the Ordnance Department under the appropriation "Ordnance service and supplies, Army" for the fiscal year 1951 total $1,438,221,342. This estimate, when added to the regular estimates of this Department for the fiscal year 1951 of $647,327,000, makes a total request of $2,805,548,342. The purposes for which the regular estimate of $647,000,000 will be expended have been explained to this committee on a previous occasion. $1,270,000,000 of the $1,438,000,000 requested in these estimates will be used for the procurement of markedly superior and improved ordnance matériel and ammunition which has been developed since World War II; $118,700,000 will be used for overhaul and rebuild of ordnance matériel; $22,000,000 will be used for the renovation of ammunition; $21,300,000 will be used for current expenses such as receipt, storage, and issue; and some $6,000,000 for maintenance of Army aircraft and troop-training activities. I would like to point out to this committee that the funds included in these estimates for major procurement cover only items of combat equipment and ammunition. No funds are included for items of at commercial nature or items which will not be used in direct support of our combat troops. Likewise, the rebuild program provided for in these estimates covers combat equipment only, and the renovation of combat ammunition. (Discussion off the record.) SUFFICIENCY OF RAW MATERIALS, LABOR, AND INDUSTRIAL CAPACITY TO MEET REQUIREMENTS Mr. MAHON. General Ford, do we have sufficient raw material, labor, and industrial capacity to meet these requirements? General FORD. I believe we do. Our ordnance establishments are pretty much scattered throughout the United States, which should lessen the impact of our requirements in any particular area. The president of the American Car & Foundry, which company, as you know, is a large car-building organization, was in my office this morning and is very anxious to get a contract for self-propelled vehicles. They have the capacity, they have the engineering personnel, and they want to get started immediately. That situation exists to some extent, although we know that in industry, in particular fields, they are going pretty much at full speed, or at maximum capacity. We anticipate and we are planning for new facilities for the manufacture of light tanks and related vehicles at Government stand-by facilities which are available to us. Mr. MAHON. Is there any hope of getting real competition in the production of some of these rather highly technical items, by industry? General FORD. We will get competition where it is possible to do So. Some contracts will be negotiated with selected contractors. These contracts will, of course, be let on the basis of price redetermination and renegotiation, with the Army Audit Agency present on the ground throughout the whole period of the contract. In addition to that, one of the things that we are doing and which we think is appropriate in the matter of over-all security, is working with the contractors who have worked with us for the last 5 years under our program of industrial mobilization. For instance, the American. Car & Foundry organization has been making studies on the production of combat vehicles. They are best able to produce such items because they are familiar with them as a result of their work over the past several years. Mr. ENGEL. Will you permit an interruption, Mr. Chairman? EFFECT OF INDUSTRIAL MOBILIZATION PROGRAM UPON EXPEDITING PRODUCTION AT PRESENT TIME Mr. ENGEL. We have been putting money in here for the last 2 years or longer for industrial mobilization. To what extent has that resulted in speeding up the program of items you want produced? General FORD. Our industrial mobilization planning should shorten the time which would otherwise have been required to get into production. This is especially true with respect to our stand-by plants. In many cases, under contracts where the Congress furnished money for phase one and phase two studies, we are prepared to place production contracts and get started in a much shorter time. Mr. ENGEL. Could you give us any idea as to the amount of time saved under this operation as distinct from the time lost when we did not have the industrial mobilization system? Would you say it has been a month, 2 months, 6 months, or what? General FORD. I think we can definitely say that it has meant as much as 3 to 6 months' saving. We have, as you know, the stand-by plants which can be in production in a very short period of time if they are required. Mr. ENGEL. That is right. General FORD. To get the stand-by plants in partial production, we figure 3 months; and in full production, in 6 months; that is on an all-out basis. This program does not cover an all-out basis, as you know. Mr. MAHON. Then we have assurance that the lowest possible dollar cost will be paid for these things in order to preserve the integrity of the taxpayer? General FORD. Yes, very definitely. Mr. MAHON. Many of these items are unbelievably expensive? Mr. MAHON. And very complicated? General FORD. But, of course, from the standpoint of what we did produce in World War II, the tanks, the artillery, and quantities, they are relatively small as to quantities. Mr. MAHON. Yes. General FORD. At the Chrysler Tank Arsenal I believe at the peak of production, they were turning out around 800 tanks a month.* Of course we had other large facilities engaged in great quantities of tank production. And you will note that in this program the quantities are relatively small in comparison. Mr. MAHON. That is right. This equipment, this range finder for antiaircraft, and the skysweeper are things that are very expensive. Is there any way to get the costs down by any appreciable degree? General FORD. It is my judgment that it is a matter of getting skilled workmen in the factories which produce them, and having quantities on order which will permit of a real economical production. I am not sure that with the quantities we have here we are going to reach the absolute minimum in the cost of these items. I am sure we cannot say we are, but I do believe that with companies engaged in production, under a system of contracts, with price redetermination and renegotiation, and with the Army audit agency continuously available and present in the plant, that we have a very good safeguard with respect to the prices we pay. |